Organigram Global (NASDAQ:OGI) reported record third-quarter fiscal 2026 revenue and adjusted EBITDA, aided by the consolidation of Germany-based Sanity Group and improving performance in several Canadian cannabis categories.
Net revenue rose 49% year over year to C$105.8 million, while adjusted EBITDA increased 136% to a record C$13.4 million. The company said Sanity Group, acquired April 15, contributed approximately C$40 million of revenue during the period and accounted for a major shift in Organigram’s geographic mix, with international operations representing about 35% of consolidated revenue, compared with roughly 10% before the acquisition.
Sanity Group supports revenue, margin growth
Sanity generated €24.5 million in revenue from the April 15 acquisition date through the end of the quarter, and €25.5 million for the full fiscal quarter, according to Organigram. Yamanaka said the business was performing in line with the company’s expectations at the time of the deal.
Chief Financial Officer Greg Guyatt said Sanity’s revenue contribution reached the company’s targeted €25 million quarterly benchmark. He added that Organigram expects the international business to post a stronger fourth quarter as it addresses flower-supply challenges.
Adjusted gross margin reached 37%, up 300 basis points from a year earlier and 600 basis points sequentially. The company attributed the increase to Sanity’s contribution and operational improvements in Canada. Management said cultivation yields, improved potency and a streamlined product portfolio are expected to support additional gains in the Canadian cost structure.
General and administrative expenses rose 31% to C$20.6 million, primarily due to Sanity-related expenses and amortization of acquisition-related intangible assets. Still, G&A declined to about 19% of net revenue, down roughly 300 basis points year over year and 600 basis points sequentially. Total SG&A expenses rose to C$32.7 million from C$24.5 million, but fell to 31% of revenue from 34% a year earlier.
Guyatt said Sanity’s operating expenses were in line with expectations and that future revenue growth could provide further operating leverage. “I would expect revenue to increase meaningfully, but operating expenses to stay sort of relatively low,” he said during the question-and-answer session.
Canadian category recovery gains momentum
Organigram ended the quarter with an 11.1% share of Canada’s recreational cannabis market. The company said it has reduced its SKU count by about 10% year over year as it seeks to simplify its portfolio, reduce operational complexity and concentrate investment behind fewer brands.
Management highlighted progress in vape and infused pre-roll products following execution issues in the second quarter. The company completed the rollout of new all-in-one vape hardware and higher-potency liquid diamond products near the end of Q2, along with enhanced quality-control processes.
In June, Organigram’s all-in-one vape share increased 1.1 percentage points month over month, while declines in the 510 vape segment began to reverse. Infused pre-rolls gained 0.3 percentage points during the month, while the company’s BOXHOT infused pre-rolls increased 0.8 percentage points year over year.
Flower remained Organigram’s strongest category. The company ended the quarter with a 12.5% share of the flower market, up two percentage points from a year earlier, and said it achieved its highest share to date in the 3.5-gram format. Average month-end THC potency reached a record 30.4%, while harvested kilograms remained above 30,000 per quarter, up about 25% year over year.
Other category results included:
- Beverage market share of 8.6%, up 3.1 percentage points year over year; the company exited June with more than 10% share as SHRED Sodas and SHRED Shotz gained traction.
- Concentrates market share of 17.9%, up 3.3 percentage points year over year, maintaining Organigram’s position as Canada’s top licensed producer in the category.
- Relatively stable edible share year over year, though the company cited sequential pressure from lower-priced live-resin competitors. Organigram plans a broader rollout of its ingestible innovation platform across edibles beginning in September.
European supply remains a focus
Organigram said demand across Sanity’s European distribution platform continues to grow, particularly in Germany, where management described supply of EU GMP-compliant cannabis flower as tight. The company is pursuing improved international flower pass rates at its Moncton facility, adding supply partnerships and establishing EU GMP-compliant remediation pathways.
Yamanaka said Germany’s regulatory environment has become more stringent on EU GMP requirements, but management believes its supply initiatives can meet most of Sanity’s needs. Organigram is awaiting an EU GMP-related regulatory response after resubmitting its application in April. The company did not provide a timeline for certification.
Guyatt said EU GMP certification could meaningfully improve margins by allowing Organigram to avoid using a European processor for cannabis shipped into Germany, though he did not quantify the potential impact.
During the quarter, Sanity prepared for an additional Swiss recreational pilot project, advanced plans to enter Poland, launched branded products in the United Kingdom through partnerships, established a Swiss medical partnership and recorded its first medical cannabis sales in Switzerland. The company said recent German changes affecting medical-cannabis reimbursement should have minimal impact because government insurance reimbursements historically represented about 1% of Sanity’s sales.
Organigram also said its Australian portfolio is broadly available and that it is working to build physician adoption and prescription growth. In the U.S., the company has paused hemp-derived THC business-development activity pending clarity on a proposed federal ban, while continuing to monitor potential rescheduling and federal legalization developments.
Cash flow affected by working capital investment
Net income was C$105.5 million, compared with a C$6.3 million loss a year earlier. The increase was primarily attributed to C$105.8 million in higher fair-value gains on derivative liabilities, preferred shares and other financial assets.
Cash generated from operating activities before working-capital changes improved to C$6.2 million, compared with C$0.7 million of cash used in the prior-year period. However, the company used C$4.3 million in operating activities after working-capital movements, versus generating C$14.6 million a year earlier, as it invested in inventory to support German demand and experienced sales-timing effects.
Free cash flow was an outflow of C$3.9 million, compared with an inflow of C$5 million in the prior-year quarter. As of June 30, Organigram had C$11.7 million in cash and cash equivalents and total liquidity of C$49.2 million, including debt facilities.
The company reaffirmed its expectation for fiscal 2026 revenue exceeding C$350 million, with adjusted gross margin and adjusted EBITDA meaningfully above fiscal 2025 levels. Management expects negative free cash flow for the full year due to integration and growth-related working-capital needs, but said it continues to anticipate positive free cash flow in the fourth quarter.
About Organigram Global (NASDAQ:OGI)
Organigram Global Inc (NASDAQ: OGI) is a licensed producer of cannabis and hemp products headquartered in Moncton, New Brunswick, Canada. Founded in 2013, the company operates a state-of-the-art cultivation and manufacturing facility spanning more than one million square feet. Organigram holds licenses from Health Canada to produce and sell both medical and adult-use cannabis, and it pursues Good Manufacturing Practice (GMP) certification to support international exports.
The company’s product portfolio encompasses dried flower, pre-rolled joints, cannabis oils, capsules and soft gels, as well as vapourizer cartridges and extracts.
